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New York Intensifies Crackdown on Illegal Cannabis Retailers, Seizing Millions in Illicit Products

Efficient Inspections Lead to Significant Seizures: 

In a comprehensive action against unauthorized cannabis sales, New York's Office of Cannabis Management (OCM) and the Department of Taxation and Finance (DTF) inspected 48 retailers in December, including 17 follow-up inspections. These inspections uncovered a substantial haul: 465 pounds of cannabis flower, 537 pounds of edibles, and 35 pounds of concentrate, collectively valued at approximately $4.26 million.

Cumulatively, these efforts have now covered 381 locations, with 105 undergoing re-inspections, leading to the confiscation of over 11,800 pounds of illegal cannabis, worth in excess of $57 million. OCM and DTF are committed to continuous inspections throughout 2024, targeting unauthorized vendors, coinciding with the opening of new, legally-operated dispensaries.

Major Brooklyn Outlet Closed: 

A significant operation on December 20 led to the closure of Big Chief Smoke Shop in Bay Ridge, Brooklyn. This notorious store, known for operating without a license, was shut down by OCM, DTF, and the New York State Attorney General's Office (OAG). The closure followed a unanimous community board resolution and local opposition, demanding a crackdown on unlicensed operations.

In addition to closing Big Chief Smoke Shop, OCM and OAG are seeking civil penalties from the property owner for knowingly allowing illegal activities. Despite prior warnings, the store continued operations for over a year. Under the Cannabis Law, property owners face fines of up to $10,000 per day for permitting unlicensed cannabis sales, potentially leading to multimillion-dollar penalties for the store owner following December's enforcement.

Statewide Inspection and Re-Inspection Efforts: 

New York's enforcement campaign spanned across all regions by the end of 2023, including Western New York, Central New York, Southern Tier, Capital Region, North Country, Lower Hudson Valley, New York City, and Long Island. Following initial inspections and issuing of violation notices, OCM and DTF conducted re-inspections to ensure compliance or identify continued illegal activities, leading to potential increased fines.

This rigorous enforcement strategy underscores New York State's commitment to eliminating illegal cannabis operations that threaten public safety, consumer health, and the legal cannabis market's integrity.

Training to Strengthen Enforcement: On January 4, OCM hosted a training event for law enforcement across the state, focusing on best practices to dismantle illegal cannabis operations. The session, aimed at senior enforcement officials, included insights from DTF’s Criminal Investigation Division, New York County District Attorney’s Office, and the Syracuse Corporation Counsel.

Chris Alexander, Executive Director of The New York State Office of Cannabis Management, emphasized the importance of legal dispensaries in combating illicit shops, highlighting consumer safety, product testing, and community reinvestment as key benefits of legal purchases. He reiterated the ongoing efforts to remove illegal products and the collaborative work at all government levels to address this public health concern.

Heightened Penalties and Expanded Partnerships: 

Fines for illegal cannabis sales start at $10,000 per day, escalating up to $20,000 for severe offenses. Additional fines and penalties under the Tax Law are also applicable. The enforcement legislation passed in May 2023 further empowers OCM to seek court orders to padlock repeat offenders and criminalizes unlicensed cannabis sales.

Governor Hochul has announced initiatives to bolster these efforts, including training programs and partnerships between OCM and OAG. These collaborations enable local governments to seek court orders to shut down egregious unlicensed operators under a new provision, Section 16-A, of the enforcement law. This collaborative approach enhances the ability of various government levels to combat illegal cannabis sales effectively.

Moreover, the Governor has integrated additional state agencies, such as the Department of Labor and the Workers Compensation Board, into these efforts. This strategic move ensures compliance with state labor and workers' compensation laws, significantly increasing the potential penalties for non-compliant businesses.

This multifaceted strategy, blending the enforcement of labor, tax, and cannabis laws, positions New York State to aggressively target illicit sales. It also underscores the Governor's commitment to upholding the law and safeguarding New Yorkers from unsafe products.

Licensed Dispensaries and Consumer Awareness: 

Currently, New York State boasts 45 licensed adult-use cannabis dispensaries. To assist consumer awareness, these licensed establishments must display the Dispensary Verification Tool sticker prominently. Any cannabis store lacking this sticker is deemed to be operating illegally, underscoring the state's effort to guide consumers towards safe and legal cannabis products.

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